There are many reasons why people leave their country and move to Panama. I moved here 7 years ago and have spoken to dozens of expats about their reasons for their move. Although the reasons are vast, the majority fall into the five reasons I will talk about below.
Leaving your country to move to another is a big decision, and for some the reasons must be extremely compelling to take such a journey. For others, it just another adventure. I was never an “adventure” type of guy, I had solid reasons to make the move, and took one full year researching moving opportunities, landing on Panama as my final choice.
Here are the five reasons I have heard the most.
Retire in the Sun
Back when I was living in Canada, I cannot tell you how many times I have heard people talking about moving and living on a beach. I am sure that is the same for any country that experiences long winters. There is just something about the sun, sand and palm trees that feels inviting, especially when looking out the window at the snow on the ground.
Retiring on a beach is a life long dream for many people, but really, it does not have to be a dream. Many of the people that end up moving to a beach in Panama, it is reduction in expense and downsizing in their life. As we get older, we seem to accumulate stuff, big house, cars and garages and sheds full of stuff.
Many people realize that if actually get ride of all the stuff, you could be in a position to live out your retirement on a quiet small beach town in Panama. There are many small underdeveloped beach towns where you can rent a small bungalow for under $500 a month, and live a simple lifestyle, that you may enjoy more than your complicated life full of stuff.
Lower Cost of Living to Enhance Fixed Incomes
Through the world, devaluation of your fixed income at retirement has become a real problem. Many people have saved their entire lives, and when they get close to retirement, they look at their savings, and their pensions, and realize that retirement lifestyle they were intending of enjoying life and travelling, may not be possible on the monthly income they will have coming in.
So, they start to look at options. What if they could live for ½ as much, then they will have many more options, like travel, bigger home, dine out more. This is a big reason people move to Panama. Cost of living here can be 1/3 – 1/2 what it is in North America or European countries. Also, cheaper quality healthcare can be a big help to the budget.
Here are some examples that you can compare to what fixed income you know you will have when you retire, and the cost of living in your country. The town of Pedasi in Panama a couple could live in a 2-bedroom rental, close to the beach, in a small community of 2500 people, for under $1500 a month. If you perfect the cooler climate, you could move to Boquete, as larger town fill of expats, and live very nicely for $2000 a month.
This reason to move here, is the one I hear more often than all the others. People have just become to realize that the fixed income they have for their retirement, is just not going to be enough to sustain the lifestyle they were hoping for in the country they are currently living, so they start looking at options, and moving to Panama, which is the #1 choice of countries to retire in in 2019, as written about by Forbes, CNBC and International Living earlier this year
Start a New Adventure or Business
There are many adventurous people out there. I have seen many young or middle age couples move to Panama and open businesses like B & B’s, Hostels, restaurants and others. Panama is a great place to do this, with its Friendly Nations Visa program, which allows people from 50 countries to move to Panama, to open a business, with as little as $5,000, and get permanent residency and a work visa.
This is a bold move and you need to do a lot of research first. Panama is different than your home country, so you need some scouting trips here to see what kind of businesses, in the area you are thinking to move to, needs. Don’t just decide to move to a specific place in Panama and open an Italian restaurant. There may be several competitors for that kind of restaurant, or Panamanians may not eat Italian as much as you thought, and many other factors.
In my seven years here, I have seen countless expats move to Panama, open a business, and it fails in the first year, all the investment money gone, and they move back home. That being said, there are many thriving businesses here run by expats, and with Panama’s friendly visa options, this can be done more affordable than in most countries. Do you research, pick the right business, then make the move.
Pay Less Taxes
This is a great reason to move to Panama is you operate a business that you can work from home, like an online business. The tax laws are very favorable in Panama to business like this. In Panama you pay taxes only on Panamanian sourced income. This is called a territorial tax system, which I go into detail this article about taxation systems.
For example, let say you have a drop shipping business, or an online consulting business. If your customers or clients are not from Panama, you do not pay taxes on that income.
Since I have been here, I have met many “digital nomads” doing business in Panama. Here I have met online marketers, people running worldwide drop shipping businesses, consulting businesses, online astrology people, and even professional online poker players.
When I moved here, that is what I did. Back in Canada, I was running a successful online business from home, in the search engine optimization field, and online product sales. The only problem I had in Canada was the 50% taxes I was paying.
So, in Moving to Panama, I decreased my monthly cost of living by 50%, and decreased my tax burden by 100%, that was a no brainier for me.
Dislike of Government in Home Country
This is a big one these days. Countries like the USA, Canada and many European countries, are so divisive in their politics, basically divided right down the middle. For example, every time there is an election in the United States, the 6-month period after the election, we get many United States Citizen moving to Panama because they do no like what is going on in their country.
Panama is not too political of a country. It is a democracy and they do have presidential elections every 5 years, but the campaigning is only for 2 months before the elections, and the country is not divided into extreme rights and lefts like other countries, with one side hating the other.
This reason of why people leave their country and move to Panama has really grown since I arrive here. It seems that the USA is at the top of this list of people moving here because they are not happy with the political system at home, or not confidence in the direction that the US economy is going. We see that here with different European countries also.
Maybe you have another reason that you are considering moving to Panama, please feel free to comment below. Whatever your reason is, I cannot stress the need enough of coming here first for a week or more, and check things out. It can be a big hit to someone financially, and we see it too often here, people move here, and for whatever reason, it is not for them, and end up moving back.
At Retire in Panama Tours, we offer a 1-week tour package, where you will get to know Panama and everything it has to offer you. We travel to every possible expat location, in the city, on the beach and up in the mountains, meet other expats and hear their stories, meet and hang with the locals, speak with lawyers about your immigration options, meet health insurance experts, getting you all the facts you need to know before making the decision to move to Panama. Check out our itinerary here.
Retire in Panama Tours
It’s more than a tour . . it’s an experience.